The Edmond Sun

Business

July 22, 2013

McDonald's falls as 2nd-quarter profit trails estimates

CHICAGO — McDonald's fell the most in nine months after posting second-quarter profit and revenue that trailed analysts' estimates and saying economic weakness would hurt results for the remainder of the year.

              

McDonald's slid 2.7 percent to $97.53 at 11:37 a.m. in New York after falling 3.2 percent for the biggest intraday drop since Oct. 19. The Oak Brook, Ill.-based company's shares had gained 14 percent this year through July 19, while the Standard & Poor's 500 Restaurants Index rose 17 percent.

              

Chief Executive Officer Donald Thompson has been trying to attract consumers with less expensive fare, such as Dollar Menu foods in the U.S. and combo meals in Europe. Sales at global stores open at least 13 months rose 1 percent in the quarter, matching the average estimate of analysts surveyed by Consensus Metrix.

              

"There are folks for whom it's an economic decision to go to McDonald's, and they're not going," Bryan Elliott, an Atlanta-based analyst at Raymond James Financial Inc., said in an interview. "We need to see a meaningful rise in purchasing power" among McDonald's customers, he said.

              

July same-store sales are projected to be unchanged from last year, Thompson said Monday in a statement. "Based on recent sales trends, our results for the remainder of the year are expected to remain challenged," he said.

              

Net income rose 3.7 percent to $1.4 billion, or $1.38 a share, from $1.35 billion, or $1.32, a year earlier, the company said. Foreign currency exchange-rate fluctuations reduced profit by 2 cents a share in the quarter. Analysts estimated $1.40 a share, the average of 27 projections compiled by Bloomberg.

              

"Several currencies weakened against the U.S. dollar during the quarter," Chief Financial Officer Peter Bensen said during a conference call today. Currency translation will negatively affect 2013 profit by 7 cents to 9 cents a share, he said.

              

The U.S. Dollar Index, which IntercontinentalExchange Inc. uses to monitor the greenback against the currencies of six U.S. trade partners, gained 3.6 percent this year through July 19.

              

Revenue rose 2.4 percent to $7.08 billion in the quarter, trailing analysts' average estimate of $7.09 billion.

              

Same-store sales rose 1 percent in the U.S., lagging behind estimates for a 1.5 percent gain, according to Consensus Metrix, a researcher owned by Wayne, N.J.-based Kaul Advisory Group.

              

McDonald's has faced a U.S. consumer environment where unemployment has been stuck above 7.5 percent for 54 straight months. Competitors also are introducing new items - Burger King Worldwide has smoothies and soft-serve ice cream, while Yum Brands' Taco Bell is testing a $1 menu.

              

During the past month, McDonald's has increased advertising for its value items to drive more customers into restaurants, Peter Saleh, a New York-based analyst at Telsey Advisory Group, said Monday in an interview. The consumer environment is volatile in the U.S., he said.

              

"There's no good footing," Saleh said.

              

Comparable-store sales declined 0.1 percent in Europe and 0.3 percent in the company's Asia Pacific, the Middle East and Africa region, during the quarter. Analysts estimated drops of 0.1 percent and 0.2 percent, respectively. Same-store sales are an indicator of a company's growth because they include only older restaurants.

              

In Europe, McDonald's is facing a cash-strapped consumer. The Big Mac seller this year has been promoting less expensive items, such as combo meals and 1 euro burgers, in Germany and France, the company's two biggest European markets. The fast- food chain gets about one-third of its revenue from countries in its Europe segment.

              

McDonald's has about 34,500 stores globally, of which 19 percent are owned by the company.

 

1
Text Only
Business
  • A Q&A on ‘Obamacare’ Court Rulings

    On Tuesday, two federal appeals courts issued conflicting rulings on the legality of tax subsidies being provided to people who bought “Obamacare” health insurance policies in Oklahoma and 35 other states.
    Here’s a look at the rulings’ potential impact in Oklahoma.

    Q: I’m confused. What did the courts rule today?
    A: A three-judge panel of the U.S. Court of Appeals circuit in Washington, D.C., decided that the government can’t provide tax subsidies for Affordable Care Act plans purchased in 36 states where the federal government is operating the health insurance exchange. Oklahoma is one of the 36 states. A few hours later, the U.S. Court of Appeals circuit in Richmond, Va., issued a conflicting ruling that upheld the legality of the health-care law’s tax subsidies.

    July 22, 2014

  • June healthy month for Oklahoma jobs

    Nearly 10,000 new jobs in Oklahoma were created in June, according to the U.S. Labor Department.
    Gov. Mary Fallin said Tuesday the state experienced one of the largest increases in employment in the nation in June. More than 9,600 additional people joined the state’s workforce in June.
    The unemployment rate in June dropped to 4.5 percent, its lowest ratio in six years. June’s rate was down a percentage point from 4.6 percent in May and April, according to the Oklahoma Employment Security Commission.

    July 22, 2014

  • UCO campus 3.jpg University of Central Oklahoma recognized as having friendly work environment

    The Chronicle of Higher Education named the University of Central Oklahoma as one of the “2014 Great Colleges to Work For.” Central is the only higher education institution in the state recognized on the list and one of only a handful of institutions in the nation given the distinction of being named to the Honor Roll for being cited most often among all the recognition categories.          
    Central joins Duke, Baylor and Notre Dame on the list of the 10 universities named to the large institution honor roll.

    July 21, 2014 1 Photo

  • Council approves funds toward ADA update

    City Council members have approved a $398,800 professional services contract with Accessology, a McKinney, Texas, firm, to establish an Americans With Disabilities Act transition plan for the city.
    Title II of the ADA requires state and local governments to make their programs and services accessible to persons with disabilities. It includes access to government facilities, programs and events and relevant policy changes.
    Accessology was selected out of a pool of five finalists by a five-member committee to create Edmond’s plan. The firm will partner with Kimley-Horn and Associates, a design consulting firm located in North Carolina.
    Edmond’s last ADA transition plan was created in 1992.

    July 21, 2014

  • Panel approves jail services agreement

    City Council members have approved renewal of the city’s jail services agreement with Oklahoma County for prisoners incarcerated at the county jail on city charges.
    The current annual agreement expired June 30. It provides the feeding, care, housing and upkeep of said prisoners. Edmond uses the county jail when the city jail is at capacity.
    The sheriff’s office proposed a slight increase from $46.25 to a $46.50 daily rate per prisoner. City staff said the current agreement is working satisfactorily and believe the proposed rate is reasonable. The new agreement took effect July 1. The city can hold prisoners in its current jail  up to 10 days; a new jail with 10 male and five female cells will be available inside the new Public Safety Center next year when the facility opens.

    July 21, 2014

  • Panel establishes 911 phone rate

    City Council members have established the rate for the 911 emergency phone service fee for calendar year 2015
    Council members set the rate at 3 percent of the recurring charges as designated by the tariff for exchange telephone service or its equivalent within Edmond beginning Jan. 1, 2015.
    Fees collected by wireless and voice over Internet protocol companies are established under a separate statute. To continue collection of the locally authorized service fee on landline phone bills, local governments must approve a resolution on an annual basis to set the actual fee.
    Governments must also through the Association of Central Oklahoma Governments notify the appropriate incumbent local exchange carrier and competitive local exchange carrier phone companies by Sept. 1, 2015.
    ACOG recommended for calendar year 2015 to maintain service fees at their current level of 3 percent.

    July 21, 2014

  • Council approves $2.5M extra for utility

    City Council members have approved the transfer of a $2.5 million appropriation for Edmond Electric.
    The action was needed due to higher natural gas prices. Those increased prices caused wholesale electric purchase costs to exceed the department’s budget estimates for Fiscal Year 2013-14. To cover the increased costs, a transfer of funds from the “Transfers” category to the “Other Services and Charges” category was necessary.
    It will maintain state law requirements and not increase Edmond Electric’s budget.
    The action occurred during Monday’s meeting and was approved unanimously.

    July 21, 2014

  • The Escape Edmond entrepreneurs sleuth their way to success

    Tripadvisor.com led Andrew Gipson to an industrial complex outside of Dublin, Ireland, about a year ago. The recent University of Central Oklahoma graduate was in the midst of an extended stay in Australia and the United Kingdom when he walked through the doors of XIT Live Escape Adventure Game. According to Tripdadvisor, it was the top attraction in Ireland. He had to go.
    An hour later, Gipson, 24, exited the facility inspired.

    July 19, 2014 1 Photo

  • McAlister’s Deli sets ‘Free Tea Day’ for July 24

    McAlister’s Deli, a leading fast casual restaurant, will celebrate its sixth annual Free Tea Day on July 24.

    July 19, 2014

  • Steffen and Farrow Steffen and Farrow celebrates 40th anniversary

    Steffen and Farrow Orthodontics recently had a ribbon cutting at its Edmond location, 1601 S. Boulevard, to celebrate its 40th anniversary.

    July 19, 2014 1 Photo

Stocks